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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Tuesday, 13 October 09
INDIA INTERESTED IN AMERICAN COAL
UPI reported that, Coal India Ltd. in its global expansion efforts is now interested in coal properties in the United States.
The Business Standard ...
Tuesday, 13 October 09
RIVERSDALE MAY USE ZAMBEZI RIVER TO TRANSPORT MOZAMBIQUE COAL
Mining Weekly reported that, ASX-listed coal-miner Riversdale Mining would submit a feasibility study and an environmental-impact study (EIS) for it ...
Monday, 12 October 09
INDONESIAN COAL MINER SAYS PLANS IPO IN 2010
Reuters reported that, Indonesian coal miner PT Bhakti Energi Persada plans an initial public offering in the first quarter of 2010 to develop coal ...
Monday, 12 October 09
BISICHI MINING FINALIZES COAL SUPPLY CONTRACT FOR 2010-2012
Small Cap News reported that, Bisichi, the South Africa based coal mining group, has agreed a three year coal supply contract between its principal ...
Monday, 12 October 09
SHANDUKA BUYS SACMH RICHARDS BAY COAL ALLOCATION
* Shanduka Coal takes SACMH 500,000T export space
* RBCT must approve any change of ownership
Reuters reported that, South Africa's Shanduka Co ...
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- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Australian Coal Association
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- White Energy Company Limited
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
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